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Investing for a student

My daughter is a student living at home with no income and is about to inherit $10,000. She wants to invest some of it (she doesn't trust herself to just have it in the bank). Would it be best to put it into a share fund or buy shares directly given that she doesn't have a lot to spend on fees or would you suggest something else?

ANSWER:

We certainly need to put it to work, otherwise it will slowly but surely be whittled away. I think at her stage of life, a managed fund is a much better option than buying shares direct. The full-time fund managers can do the stock selection which will leave her time to focus on her studies.

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Hopefully, there is a family adviser who can point you in the right direction. If she does choose shares, make sure she is aware that share markets can fall as well as rise – the last thing she needs to do is panic and sell when the market is having one of its normal downturns.